CAMT Reproposed Regulations Target February 2027: Five Provision Moves to Make Before They Land
Treasury confirmed reproposed CAMT regulations arrive February 2027. Five notices in, your ASC 740 provision still has gaps. Here is how to close them before the rules lock.
Editorial source review — November 1, 2026. This machine-generated article has been reviewed, but is not certified accurate. Source-backed corrections are incorporated where established. Other legal, survey and product claims may remain unverified; check applicable primary authorities before relying on a deadline or tax position.
Findings in the original version: IRS Notice 2026-7 supports conditional interim AFSI adjustments. A Treasury official's reported target for \\reproposed\\ rules is not a guarantee that uncertainty ends or rules “lock” in February 2027.
A senior Treasury official confirmed this week: reproposed Corporate Alternative Minimum Tax regulations arrive in February 2027. EY's international tax team reported the timeline on October 23. That is not a distant planning horizon. That is twelve weeks — which means two more quarterly provision closes, one annual close, and a finite window to get your CAMT position documented before the rules lock.
The CAMT has been a moving target since the Inflation Reduction Act enacted it in August 2022. Treasury issued proposed regulations in September 2024. Five notices have modified those proposed rules since then. Each notice changed the provision calculation. The most recent — Notice 2026-7, issued February 18, 2026 — introduced new AFSI adjustments for repair expenditures on eligible assets that shifted the CAMT liability materially for companies with significant capex programs. February 2027 is when the structural uncertainty ends. Here is what your team needs to do before it does.
What CAMT Actually Is — and Why Every Notice Restarts Your Provision
The CAMT applies to corporations with average annual adjusted financial statement income (AFSI) above $1 billion over any three consecutive prior tax years. The rate is 15% on AFSI. It is a minimum — it applies to the extent it exceeds your regular income tax liability for the year. The excess of CAMT paid over regular tax creates a CAMT credit carryforward, which offsets regular income tax in future years when regular liability exceeds the CAMT.
That structure creates two ASC 740 line items that must be maintained in parallel with the regular provision. First: the current CAMT liability, computed on current-year AFSI. Second: the CAMT credit carryforward, which is a deferred tax asset subject to the more-likely-than-not realizability standard. Every time Treasury issues guidance that modifies what counts in AFSI, both numbers change.
Notice 2026-7 added the right to adjust AFSI downward for repairs on eligible assets — specifically, companies may reduce AFSI by the tax-deductible portion of repair costs and must exclude book depreciation on those assets from AFSI. For manufacturers, utilities, and any company with large eligible repair programs, this is not a minor adjustment. It changes the current CAMT liability and changes the DTA valuation model. If your provision team processed this as a discrete item in Q1 2026, you are current. If you did not, you are carrying a stale AFSI calculation into Q4.
The Five-Notice Track Record — and What February Resolves
The regulatory history of CAMT is worth mapping explicitly, because each notice represents a mandatory provision restart that many teams did not catch in real time.
September 2024 — Proposed regulations. First comprehensive CAMT framework. Introduced AFSI adjustments for partnership interests, depreciation timing differences, and mark-to-market elections for financial instruments.
Notice 2024-87. Clarified treatment of certain financial instruments and pension obligations in AFSI. Added flexibility for regulated investment companies.
Notice 2025-49. Confirmed taxpayers may rely on the 2024 proposed regulations as modified by subsequent notices until final guidance issues. This is the reliance framework your team should have documented in its technical positions file.
Notice 2026-7 (February 18, 2026). The most impactful structural change since the original proposed regs. Eligible repair asset adjustments. Exclusion of related book depreciation from AFSI. Recognized as a discrete item in the Q1 2026 provision. If your Q4 2025 CAMT DTA valuation analysis did not reflect the repair asset methodology, you had a catch-up discrete item in Q1 2026 — whether or not you recognized it.
Reproposed regulations — February 2027. Will address the remaining open questions: how Pillar Two GloBE top-up tax payments interact with AFSI, the financial reporting group definition for entities consolidated or deconsolidated mid-year, and the treatment of certain asset recovery elections not covered by the prior notices.
The February reproposal is not the final word — it triggers another comment period, likely 60 days, with final regulations to follow. But the substantive positions will be set. What the reproposal locks is the AFSI framework that your forward provision projections must be built on.
The CAMT Credit Carryforward DTA — Your Most Undervalued Balance Sheet Item
The CAMT credit carryforward DTA is realized when your regular tax liability in a future year exceeds your CAMT liability. For companies with moderate CAMT exposure and a regular effective tax rate in the 20–25% range, the carryforward realizes systematically over time. The question is the valuation allowance analysis.
That analysis requires a forward-looking projection of both your regular income tax liability and your CAMT liability by period. The projection has to incorporate:
- AFSI adjustments from all active notices — not just the most recent one
- Your Pillar Two top-up tax position, because GloBE top-up taxes are not yet definitively addressed in the CAMT framework and the interaction affects both the CAMT current liability and the realizability of the credit
- Any planned intercompany transactions or restructuring that changes the relationship between financial statement income and taxable income
- The impact of the reproposed February regulations on your forward AFSI calculation
The Open Technical Positions February Will Either Validate or Override
Three technical positions that your team is currently holding under Notice 2026-7 and the 2024 proposed regulations will be directly addressed by the February reproposal. Document each one explicitly before December 31, 2026.
Pillar Two interaction. GloBE top-up tax payments are not regular income taxes. They are not definitively included or excluded from AFSI under current guidance. Your technical position here — whether you are including them, excluding them, or treating them under a specific characterization theory — will be validated or overridden by the reproposal. If you have not written down your current position and the authority for it, you cannot measure the provision impact when the regulations land.
Financial reporting group definition. The CAMT $1 billion threshold is measured at the financial reporting group level — the group of entities whose income is consolidated in the ultimate parent's audited financial statements. For companies with mid-year acquisitions or dispositions, the group membership changes during the measurement period. The reproposed regs will set the definitive rule. Your current position on whether a disposed entity counts in the three-year lookback needs to be explicit.
Repair asset eligible population. Notice 2026-7 allows AFSI reduction for repairs on "eligible repair assets." The definition of eligible assets is not exhaustive. If your team has taken the position that certain asset classes qualify, document that position with the relevant authority. The reproposal will either confirm it or require a catch-up.
What to Do Monday Morning
1. Confirm your Q4 2026 AFSI calculation reflects all Notice 2026-7 repair asset adjustments. Pull the calculation and verify that eligible repair assets are identified and that book depreciation on those assets is excluded. If the catch-up was not processed as a discrete item in Q1 2026, process it in Q4. Document it as a prior-period adjustment from the notice date. 2. Map your CAMT credit carryforward DTA against forward regular tax projections by period. The realizability analysis must incorporate your Pillar Two top-up tax position and your planned AFSI-affecting transactions through 2029. Document the technical basis for any valuation allowance conclusion. 3. Write down your three open technical positions — Pillar Two interaction, financial reporting group composition, and eligible repair asset population. One page per position. Authority cited. Conclusion stated. These documents exist to absorb the impact of the February reproposal, not to replace professional judgment. 4. Build the February 2027 reproposal into your Q4 2026 provision calendar. Schedule a specific review of the proposed regulations for the week they are released — Treasury is targeting early February. Assign the discrete item analysis to a named team member before year-end. 5. Read EY's October 23 report on the CAMT regulatory timeline. It is the most current public source on the February target date and the remaining open items. Share it with your external auditors at your Q4 provision planning meeting. The sooner they know the timeline, the less friction you get at year-end close.
The CAMT has generated more provision complexity per dollar of tax than any provision of the Inflation Reduction Act. Five notices in twenty-six months is not normal regulatory pacing. It reflects genuine difficulty in translating a financial-statement-based minimum tax into a technically coherent regulatory framework. The February reproposal will not end the complexity — it will reframe it. The teams that are prepared are the ones that have been maintaining a live AFSI calculation, documenting their technical positions explicitly, and treating the CAMT credit carryforward DTA with the same rigor as any other complex deferred tax asset.
At Clarity Tax, the CAMT calculation is not a separate workpaper. It runs on the same data infrastructure as the regular ASC 740 provision, with notice updates propagated automatically. When February's reproposed regulations land, the catch-up analysis runs in hours, not weeks.